Title: Impact of IFRS adoption in Sri Lanka: an evaluation of financial reporters' perception

Authors: Habeeb Mohamed Nijam

Addresses: Department of Accountancy and Finance, Faculty of Management and Commerce, South Eastern University of Sri Lanka, University Park, Oluvil #32360, Sri Lanka

Abstract: The purpose of this study is to examine the perceived impact of International Financial Reporting Standards (IFRS) adoption and whether it relates to firms' characteristics. The study was conducted among all 62 companies listed in bank, finance and insurance sector at Colombo Stock Exchange (CSE) using questionnaires addressed to financial and accounting professionals. The study employed principal component analysis and one-sample Wilcoxon signed-rank test and found that the IFRS adoption is perceived to have significantly improved financial reporting quality and corporate governance of firms. Though IFRS caused increased cost of financial reporting, it is yet perceived to be a net gain. However, respondents tend to perceive that IFRS adoption has not assured capital market benefits to the firms in bank, finance and insurance sector in Sri Lanka. It is also found that firms' size and profitability significantly and positively associate with perceived impact of IFRS on quality of financial reporting and corporate governance of firms. This study provides evidence for IFRS impact from a developing economy.

Keywords: IFRS adoption; International Financial Reporting Standards; one-sample Wilcoxon signed-rank test; SLFRS; Sri Lanka; perceptions; principal component analysis; PCA; financial reporting quality; corporate governance; financial reporting costs; firms size; profitability; emerging economies.

DOI: 10.1504/IJMFA.2016.077952

International Journal of Managerial and Financial Accounting, 2016 Vol.8 No.2, pp.151 - 171

Available online: 23 Jul 2016 *

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